Since 2007 China has won three of the eleven contracts that the Iraqi Ministry of Oil has signed to increase the extraction of crude oil by 450 percent in the next seven years. The latest feat, achieved on behalf of the China National Petroleum Corporation (CNPC) and British Petroleum (BP), was a 20-year contract for the Rumaila field, the biggest reserve in Iraq, with an estimated 17.7 billion barrels at its disposal. BP and the CNPC accepted the price of two dollars a barrel offered by the Ministry. To put this in context, consider that the US oil giant Conoco Phillips turned down the price of four dollars a barrel offered for extraction in the Bai Hassan field, after making bids starting from 26.7 dollars a barrel.
The CNPC, whose capital is entirely in the hands of the Chinese government, also renegotiated another agreement worth three billion dollars, first made when Saddam Hussein was still in power.
Chinese interests are not limited to oil alone, but reach much further. Beijing is also looking at cement, the supply of services and constructions, and is willing to invest in the reconstruction to demonstrate its "good intentions" as a good investor (a strategy successfully implemented in Africa, too). In truth, China can boast an excellent track record in Iraq: it did not take part in the invasion, it did not adhere to the sanctions and, above all, it was a trustworthy trading partner during the reign of Saddam Hussein. The Chinese population of almost a billion and a half is thirsty for oil. Last year alone, demand grew by a monstrous 13 percent and Beijing needs 8 and a half million barrels a day to keep Chinese industry moving. This thirst, and the fact that the United States cannot now rest on its economic laurels, make China a fierce competitor that will accept the risk of Iraqi instability and the setting of a price that brings the market down.
Anonymous sources in the Pentagon blame the Chinese takeover on the global crisis, but the French ambassador in Baghdad, Boris Boillon, is convinced that the USA is missing out on a great Iraqi occasion because of a sense of exhaustion. "The Americans are tired; they're thinking twice before coming to invest in what they see as a 'blood-tainted state'".
The Ministry of Industry has tried everything to bring in United States investors (who, in Baghdad, are still seen as the most reliable), but to no avail. "The USA (companies - ed.) just don't know what to do in Iraq", the Minister, Fawzi Hariri, confessed to the Washington Post.
China does, though. And it's proving that it knows what to do in the other theatre of war, in Afghanistan, where it leads foreign investors with a contract of 3.5 billion dollars for copper mining rights in Aynak, thirty kilometres south west of Kabul. Here too, the Afghan people have been approached not as if by an invader, but rather by a friendly (bordering) nation that wants to cultivate good neighbourly relations, thinking of the Chinese troubles in Muslim Xinjiang, that borders with Afghanistan.
The irrigation system in the province of Parwan, the conference hall in the presidential palace and Jamhuriat hospital in Kabul have greater appeal than the projects of the USA, often contracted out to Pakistanis, Indians and the Chinese themselves. The 180 million dollars invested in the reconstruction by the Chinese thus overshadow the twelve billion dollars given by United States treasury.